Monolithic Power Systems: 6 Different Insiders Have Sold Shares During The Last 30 Days

Dec. 2.13 | About: Monolithic Power (MPWR)

In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Monolithic Power Systems (NASDAQ:MPWR), a fabless semiconductor company, designs, develops, and markets analog and mixed-signal semiconductors for the communications, computing, consumer, and industrial markets.

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Insider selling during the last 30 days

Here is a table of Monolithic Power Systems' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Herbert Chang Director Nov 6-29 34,643 No 11,119 shares 75.7%
Deming Xiao President of MPS Asia Operations Nov 6-26 8,396 No 60,026 shares 12.3%
James Moyer Director Nov 11-26 34,000 Yes 1,238,584 shares 2.7%
Saria Tseng VP Nov 5-22 12,858 No

45,852 shares

21.9%
Maurice Sciammas SVP Nov 4-13 28,549 Yes 110,292 shares 20.6%
Meera Rao CFO Nov 4-11 5,000 Yes 51,063 shares 8.9%
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There have been 123,446 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Monolithic Power Systems' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 123,446 0
October 2013 489,998 0
September 2013 97,767 0
August 2013 229,072 0
July 2013 306,782 0
June 2013 10,422 0
May 2013 218,065 0
April 2013 43,557 0
March 2013 6,551 0
February 2013 250,009 0
January 2013 68,893 0
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There have been 1,844,562 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.

Financials

Monolithic Power Systems reported the third-quarter financial results on October 24 with the following highlights:

Revenue $65.3 million
Net income $7.4 million
Cash $204.3 million
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Outlook

Monolithic Power Systems' guidance for the fourth quarter is as follows:

Revenue $61-$65 million
Gross margin 53.5-54.5%
GAAP R&D and SG&A expenses $25.0-$26.8 million
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Competition

Monolithic Power Systems' competitors include Analog Devices (NYSE:ADI), STMicroelectronics (NYSE:STM), and Texas Instruments (NYSE:TXN). Here is a table comparing these companies.

Company MPWR ADI STM TXN
Market Cap: 1.28B 14.98B 7.01B 47.07B
Employees: 993 9,200 48,460 34,151
Qtrly Rev Growth (yoy): 0.16 -0.01 -0.07 -0.04
Revenue: 222.74M 2.65B 8.23B 12.16B
Gross Margin: 0.51 0.64 0.32 0.51
EBITDA: 25.23M 893.19M 475.00M 3.98B
Operating Margin: 0.06 0.30 -0.05 0.23
Net Income: 15.65M 651.12M -892.00M 1.88B
EPS: 0.41 2.10 -1.01 1.69
P/E: 82.06 22.97 N/A 25.47
PEG (5 yr expected): 1.78 2.13 -5.83 2.41
P/S: 5.74 5.69 0.85 3.83
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Monolithic Power Systems has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
ADI 0 789,087
TXN 0 4,296,925
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Only Monolithic Power Systems has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Monolithic Power Systems and there have not been any insiders buying Monolithic Power Systems during the last 30 days. Four of these six insiders decreased their holdings by more than 10%. Monolithic Power Systems has an insider ownership of 4.30%.

Monolithic Power Systems is trading at a P/E ratio of 82.06 and a forward P/E ratio of 23.23. The company has a book value of $8.37 per share.

Before entering short Monolithic Power Systems, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.